×
You will be redirected back to your article in seconds

Antitrust Chief Offers Hints of Why AT&T-Time Warner Merger Approval Hit a Snag

WASHINGTON — Makan Delrahim, who leads the antitrust division at the Department of Justice, offered some clues on Thursday as to how he views the proposed merger of AT&T-Time Warner and other major transactions.

AT&T appears to be facing major roadblocks in its effort to secure government approval of the $85 billion merger, as the Justice Department has reportedly sought out state attorneys general to join a lawsuit to block the transaction. Last week, AT&T executives reportedly were told that they had to divest Turner Broadcasting, which includes CNN, or DirecTV to get a green light.

Speaking before the American Bar Association on Thursday, Delrahim did not mention the AT&T-Time Warner transaction by name, but he said that he was no fan of placing so-called behavioral conditions on mergers, and instead prefers structural remedies, in which companies sell off business units.

“Instead of protecting the competition that might be lost in an unlawful merger, a behavioral remedy supplants competition with regulation; it replaces disaggregated decision making with central planning,” Delrahim said in his speech.

He cited DOJ guidelines that behavioral conditions “impose direct, frequently substantial, costs upon the government and public that structural remedies can avoid.”

“Like any regulatory scheme, behavioral remedies require centralized decisions instead of a free market process,” Delrahim said. “They also set static rules devoid of the dynamic realities of the market.  With limited information, how can antitrust lawyers hope to write rules that distort competitive incentives just enough to undo the damage done by a merger, for years to come?  I don’t think I’m smart enough to do that.”

AT&T CEO Randall Stephenson has said that he believes that the proposed merger is the type of “vertical” transaction that typically does not raise serious issues of anticompetitive conduct.

But Delrahim noted that another major vertical transaction, Comcast’s acquisition of NBC Universal in 2011, garnered Justice Department approval after it agreed to a set of behavioral conditions, which are set to expire next year. “Several observers took issue with this regulatory approach to antitrust enforcement,” Delrahim said.

“Behavioral remedies often require companies to make daily decisions contrary to their profit-maximizing incentives, and they demand ongoing monitoring and enforcement to do that effectively,” Delrahim said. “It is the wolf of regulation dressed in the sheep’s clothing of a behavioral decree. And like most regulation, it can be overly intrusive and unduly burdensome for both businesses and government.”

Last week, Stephenson said that AT&T was preparing for litigation. An AT&T spokesman on Thursday confirmed a report that the company had hired attorney Daniel Petrocelli of O’Melveny & Myers to defend the merger. He represented Fred Goldman in the wrongful death suit against O.J. Simpson, the Hollywood Foreign Press Association in its litigation against Dick Clark Productions, and Donald Trump in litigation filed by former students of Trump University.

 

More Politics

  • Sarah Huckabee Sanders Jemele Hill

    Sarah Huckabee Sanders to Leave the White House

    White House press secretary Sarah Huckabee Sanders is leaving her position at the end of the month, President Donald Trump said Thursday. In two tweets, Trump announced Sanders’ departure for her home state of Arkansas before thanking her for “a job well done.” He also recommended her for the Arkansas governor position, writing, “She is [...]

  • Kellyanne Conway

    Federal Watchdog Says Kellyanne Conway Should Step Down

    A federal watchdog has recommended that White House counselor Kellyanne Conway should be fired for repeated violations of the Hatch Act. In a report on Thursday, the U.S. Office of Special Counsel found that Conway had used TV appearances and social media platforms to disparage Democratic presidential candidates while speaking in her official capacity. “Ms. [...]

  • Jessica Biel Clarifies Anti-Vaccine Stance

    Jessica Biel: 'I Am Not Against Vaccinations'

    Jessica Biel clarified her stance on vaccinations after public outcry over news that the actress joined Robert F. Kennedy Jr. to lobby against a California state pro-vaccine bill. “I am not against vaccinations,” Biel wrote on Instagram Thursday morning. “I support children getting vaccinations and I also support families having the right to make educated [...]

  • 'The Sinner' film premiere

    Jessica Biel Joins Robert F. Kennedy Jr. to Lobby Against California Vaccine Bill

    Jessica Biel joined the controversial anti-vaccination advocate Robert F. Kennedy Jr. to lobby against a California state pro-vaccine bill on Tuesday, revealed in several social media posts. “Please say thank you to the courageous @jessicabiel for a busy and productive day at the California State House,” Kennedy posted on Tuesday with a series of pictures [...]

  • Hope Hicks Resigns

    Hope Hicks to Give Closed-Door Testimony to Judiciary Committee

    Hope Hicks, the chief communications officer at Fox, has agreed to answer questions before the House Judiciary Committee next week. The hearing will be held behind closed doors, but the committee will make a transcript available afterward. The committee is continuing to follow up on the report of Special Counsel Robert Mueller. Hicks is set [...]

  • Michael Wolff Fire and Fury

    5 Takeaways From Michael Wolff's 'Siege: Trump Under Fire'

    Michael Wolff’s “Siege: Trump Under Fire” looks at the 45th president’s second year in office, detailing everything from a potential indictment to Melania Trump’s mysterious hospitalization. It’s the follow-up to Wolff’s “Fire and Fury,” and though this installment likely won’t reach the commercial heights of its predecessor, it’s certainly not lacking in titillating reveals. Several [...]

  • Donald Trump

    Trump Says His Meghan Markle ‘Nasty’ Comment Was Taken Out of Context

    After first denying he made the comment, President Trump now says his remark describing Meghan Markle as “nasty” was taken out of context, telling Piers Morgan instead that he thinks the Duchess of Sussex is actually “very nice.” Trump called Markle “nasty” in an interview with British tabloid The Sun ahead of his three-day state [...]

More From Our Brands

Access exclusive content